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ARTICLE · 16 MARCH 2021

Contractual Discretion Must Be Exercised Reasonably: Supreme Court Of Canada

Stikeman Elliott LLP
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The Parties had a long-standing contract which governed the removal and transportation of waste by Wastech to three disposal facilities: one in Vancouver, one in Burnaby, and one in Cache Creek.

CanadaLitigation, Mediation & Arbitration
Michael Mestinsek
Michael Mestinsek
Joseph Wenig
Joseph Wenig
Ben Muller
Ben Muller
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The Supreme Court of Canada ("SCC") in two recent decisions has continued to clarify and explain the scope of the principle of good faith, which was recognized by the SCC in 2014 as an organizing principle of contract law. The first of these decisions, Callow v. Zollinger, 2020 SCC 45 ("Callow") (discussed in a previous post), dealt with one aspect of good faith in contracts: the duty to perform contracts honestly (commonly referred to as the duty of honest contractual performance). More recently, the Court released its ruling in the companion case of Wastech Services Ltd v. Greater Vancouver Sewerage and Drainage District, 2021 SCC 7  ("Wastech"), which clarifies a second aspect of good faith in contracting: the duty to exercise contractual discretion reasonably.

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